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    PC Sales Slow as Windows XP Refreshes Tail Off

    By
    Jeff Burt
    -
    April 10, 2015
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      Dell notebook

      The magic of the Windows XP refresh is over—and that, combined with the wait for Microsoft’s upcoming Windows 10, is helping slow PC sales around the world.

      Analysts with both IDC and Gartner this week said global shipments of PCs fell in the first three months of the year, though Mikako Kitagawa, principal analyst at Gartner, said much of the decline came from the desktop segment of the market and that, longer term, the PC space—driven by mobile systems—will begin to grow again in 2016 and beyond.

      “The PC industry received a boost in 2014 as many companies replaced their PCs due to the end of Windows XP support, but that replacement cycle faded in the first quarter of 2015,” Kitagawa said in a statement. “However, this decline is not necessarily a sign of sluggish overall PC sales long term. Mobile PCs, including notebooks, hybrid and Windows tablets, grew compared with a year ago. The first-quarter results support our projection of a moderate decline of PC shipments in 2015, which will lead to a slow, consistent growth stage for the next five years.”

      Overall, Gartner analysts said PC shipments worldwide in the first quarter fell 5.2 percent from the same period last year, hitting 71.7 million units. IDC analysts estimated 68.5 million units shipped during the quarter, a 6.7 percent drop from the first quarter of 2014.

      The PC market had seen a steady decline in shipments between 2011 and 2013 as the popularity of smartphones and tablets grew. OEMs and component makers like Intel and Advanced Micro Devices were slow to respond to the threat.

      The market saw a resurgence last year as businesses refreshed their PCs due in large part to Microsoft’s decision to end support of the aged Windows XP operating system. Intel CEO Brian Krzanich and other tech executives also said new form factors—such as convertibles, two-in-one systems and Ultrabooks—with more features and lower prices helped push sales worldwide.

      That dependency on pricing could foretell changes in the PC space, according to Jay Chou, senior research analyst for IDC’s Worldwide PC Trackers unit.

      “Although shipments did exceed an already cautious forecast, the market unfortunately remains heavily dependent on pricing being a major driver, with entry SKU volume masking a still tenuous demand for higher priced systems that is needed to sustain a more diverse PC ecosystem,” Chou said in a statement. “Pricing pressure is bringing many premium SKUs into formerly mid-level pricing tiers. As more vendors find it increasingly difficult to compete, we can expect additional consolidation in the PC market.”

      Rajani Singh, senior research analyst for personal computing at IDC, noted that Windows 10—which is expected to be launched in the fall—will bring together the best of Windows 7 and the less-popular 8.1. The release of Windows 10 and Microsoft’s offering a free upgrade for consumers for a year after the launch “should be a net positive as there is pent-up demand for replacements of older PCs. Only part of the installed base needs to replace systems to keep the overall growth rate above zero for rest of the year,” Singh said in a statement.

      For now, PC makers will have to muddle through what could be a difficult 2015. In the first quarter, both Lenovo and Hewlett-Packard saw the number of PC shipments grow, while shipments for both Dell and Acer fell, according to the market research firms. Gartner analysts said Asus also saw shipments fall, by 2.9 percent, while IDC had shipments for the OEM growing 4.4 percent.

      Lenovo kept its slight lead over HP as the world’s largest PC vendor, with 19.6 percent of the market in IDC’s list and 18.9 percent in Gartner’s tally. HP’s market share was 19 percent (IDC) and 17.3 percent (Gartner). Dell was third on both lists, while IDC had Acer at number four and Asus at number five. Gartner had those last two vendors switched.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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